The Central Bank of Nigeria (CBN) has issued a strict one-month deadline for financial institutions, payment processors, and Point of Sale (PoS) terminal service providers to fully implement mandatory dual connectivity for PoS transactions. The directive is aimed at reducing frequent service disruptions and strengthening the resilience of the nation’s electronic payment infrastructure amid rapid digitalisation of financial services.
In a circular dated December 11, 2025 and signed by Rakiya Yusuf, Director of the CBN’s Payments System Supervision Department, the apex bank ordered that all PoS acquirers, processors and payment terminal service providers must maintain active links with both the Nigeria Inter-Bank Settlement System (NIBSS) and Unified Payment Services Limited (UPSL). The measure builds on a policy introduced in September 2024 aimed at addressing the vulnerabilities exposed by reliance on a single routing channel for transactions.
The CBN said the new requirement is designed to eliminate single-point failures that have frustrated merchants, agents and customers across the country, particularly in rural and urban retail environments that depend heavily on PoS terminals for everyday transactions. Under the updated rules, PoS networks must be configured to allow automatic failover, so that if one provider experiences downtime, the system can immediately switch to the other without interrupting service.
“The policy aims to address frequent PoS downtime caused by reliance on a single transaction channel,” the circular stated, emphasising that the move will stabilise Nigeria’s payment infrastructure and boost confidence among users of digital financial services.
To ensure compliance, the CBN has mandated periodic redundancy and failover tests involving both NIBSS and UPSL. These tests are intended to demonstrate that systems can support uninterrupted service and will form part of the apex bank’s ongoing supervisory oversight.
The circular also introduces stricter reporting obligations. In the event of downtime or any disruption, both NIBSS and UPSL must notify affected banks immediately and submit a detailed incident report to the Payments System Supervision Department within 24 hours, outlining the cause of the disruption, its impact and corrective action taken.
The one-month compliance window means that financial institutions and service providers have until January 11, 2026 to complete the integration, with the CBN warning that failure to meet the deadline could lead to regulatory sanctions. Although specific penalties were not detailed in the circular, industry watchers say non-compliance could affect licensing status and operational authorization for terminal service providers.
Industry analysts and payment experts have welcomed the directive, saying it underscores the regulator’s commitment to building trust in Nigeria’s cashless ecosystem. Over the past few years, PoS terminals have become a backbone of everyday financial activity, especially in areas underserved by traditional banks. However, periodic outages have frustrated users, disrupted business activities and sometimes slowed wider adoption of digital payments.
Dual connectivity means transactions will be able to route through two independent systems — NIBSS and UPSL — increasing redundancy and reducing the likelihood that system failures at one provider will paralyse financial activity. Observers say this should enhance transaction reliability and customer satisfaction, particularly as millions of merchants depend on PoS terminals for daily revenue collection and remittances.
The directive follows other recent CBN interventions in the PoS space aimed at tightening oversight and reducing fraud. Earlier in 2025, the CBN mandated geo-tagging of all PoS terminals to improve traceability and curb illegal practices, requiring each device to transmit its registered GPS coordinates to regulators — a step meant to reduce fraud associated with mobile or rogue terminals.
However, payment service providers will face operational challenges to meet the deadline, particularly in integrating legacy systems and ensuring seamless compatibility between NIBSS and UPSL interfaces. Some smaller payment service providers have already expressed concerns that the timeframe may be tight, given technical and logistical complexities. Yet regulators argue that the long-term benefits — including fewer service outages and higher consumer confidence — outweigh short-term challenges.
Experts say that PoS remains one of the most critical pillars of Nigeria’s push toward a less cash-dependent economy, and that institutionalising resilience measures like dual connectivity will be key to sustainable growth. With cashless transactions handling billions of naira daily, ensuring that payment channels remain robust and dependable has become a priority for both the CBN and industry stakeholders alike.
As Nigeria continues its digital finance transformation, the CBN’s latest directive signals a clear regulatory focus on system reliability, consumer protection and market confidence — essential components of a modern financial ecosystem capable of supporting economic activity across diverse sectors.
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